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Saturday, 17 April 10
DRY BULK SHIPPING MARKET ANALYSIS - BIMCO
 Strong Chinese steel market is set to cushion the flood of new Capesize vessels entering the dry bulk fleet Demand: The first quarter of 2010 saw ups and down for the BDI with the index hovering around 3,000. It seems as if the market is balanced on a knife edge. High supply is likely to overmatch even very healthy demand growth rates – strongly dependant on China.
Chinese iron ore imports continue to remain firm. In the first quarter of this year, China has imported an average of 51.68 million tons (mt) of ore. In 2009, iron ore imports reached a monthly average of 52.37mt, leaving this year’s ore imports just 1% short of 2009 levels, but still very healthy at 14.7mt (40%) more than 2008 levels. With steel prices rising above those of 2009 – Chinese iron ore imports will continue as the prime driver in the dry bulk market.
However, the present spot rates are not expected to stay that low as time charter rates stay strong as illustrated by the reported BHP Billiton booking of a Capesize vessel for 3-5 months at USD/day 37,000 - more than 30% premium to spot. The current FFA (Forward Freight Agreement) rates also point in that direction with Capesize Q2 FFA going up to USD/day 35,750 and Panamax Q2 going down to USD/day 28,500.
Supply:
The active fleet has grown by 3.5% during first quarter of 2010, caused by deliveries of 16 million DWT of newbuildings offset by just 1 million DWT being demolished. Since BIMCO Bulletin 1/2010, the total dry bulk order book has increased by 5.5 million DWT. It seems as though the optimism from surprisingly healthy freight rate levels in 2009 has made contracting go on – despite the fact that the 285 million DWT that comprises the order book today is doomed to make challenging markets in short as well as long-term.
Year-to-date deliveries in capesize amount to 47 ships comprising 8.7 million new DWT, resulting in an increased fleet size of 5% so far in 2010 and active Capesize vessel number 1,000 has just been delivered. At the beginning of 2009, 822 Capesize vessels were active, but an inflow of 112 newbuildings and 29 converted vessels was added to the existing fleet, counterbalanced by just 9 demolitions, leaving a fleet tonnage growth of 18.5% in 2009.
An additional 305 Capesize vessels are scheduled for delivery in 2010, but “only” 183 will hit the water, when applying the BIMCO assumptions for supply forecast as described next to the graphics. In total, this will in turn mean that Capesize tonnage could grow by 21% when fine-tuning for an average scrapping age of 26 years for Capesize vessels
as compared to the average of 30 years for the overall fleet.
BIMCO forecasts inflow of new dry bulk tonnage in 2010 to reach 76 million DWT, offset by demolition of as much as 13 million DWT. This could make the fleet grow by 14% in 2010 as compared to 10% in 2009. Deliveries in 2011 are forecast to be even higher before supply growth comes down in 2012.
Clarkson’s have scheduled deliveries of 120-130 million DWT in 2010. BIMCO assumes that 10% of the entire order book will not be built and one third of the rest will be deferred by one year. Furthermore, the demolition potential is calculated to 49 million DWT, equal to all vessels aged 30 or above to be demolished by the end of 2013.
Outlook:
The fortunes of the dry bulk markets are basically down to the fortunes of China. March was the 13th straight month that the official Chinese PMI (Purchasing Managers Index) has stood above the threshold of 50 that demarcates expansion from contraction, indicating that the Chinese economy is on a stable and relatively fast growth track. PMI rose to 55.1% in March, up 3.1% on last month, according to data released by the China Federation of Logistics & Purchasing.
The housing market and huge infrastructure projects have been primary beneficiaries of the Chinese Government’s stimulus package. With the construction sector being the number one steel user, consuming around 50% of Chinese steel, it goes without saying that a continuance of the strength in this sector is vital for the health of the dry bulk freight rates.
Freight rates are forecast by MSI to drift sideways on current levels over the next 6 months. Capesize rates are forecast to stay around USD 30-35,000 per day while the smaller vessel types could see rates go down from current levels to around USD 16-24,000 per day.
Current news:
BHP Billiton has reached agreement to sell the majority of its iron ore to Asian steel mills on shorter term contracts, ending more than 40 years of annual pricing. Brazilian Vale have also inked new iron ore prices – resulting in price hikes of around 90%– indicating a continued strong demand for the vital raw material in steel production. Contract prices for coking coal are also expected higher.
Meanwhile, the China-Rio Tinto bribery case has just been settled. The court in Shanghai sentenced the four convicted Australian mining giant Rio Tinto employees to prison for a total 39 years. They were found guilty after having admitted to accepting about USD 13 million in bribes from private steel mills that wanted to avoid purchasing iron ore from more costly state-run mills. The arrangement undercut the state’s China Iron and Steel Association’s desire for a united front in negotiating with Australian suppliers. Shortly after the verdict the employees were sacked for clear violation of Chinese Law and Rio Tinto’s code of conduct. China claims its steel sector paid as much at USD 160 million too much last year for iron ore because of bribery and espionage. While the three Chinese defendants have decided to appeal terms, the Australian national Stern Hu appears to be the only one not appealing terms.
Source: Bimco / Hellenic Shipping
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Wednesday, 04 April 12
CHURCHILL MINING TO ACCELERATE INTERNATIONAL ARBITRATION AGAINST INDONESIA
Churchill Mining plc (AIM: CHL), advises that notations on the Indonesian Supreme Court's register of cases shows the Supreme Court has rejected th ...
Monday, 02 April 12
BANGLADESH EYEING INDONESIA FOR COAL
COALspot.com - The high level executives of Center for Environmental and Geographic Information Services (CEGIS) of Bangladesh is visiting Ind ...
Monday, 02 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first quarter of the New Year ended with the BDI standing 42% above from the 26 years’ bottom low of 662 points on February 1st, and a pos ...
Saturday, 31 March 12
THE BDI CONTINUED TO MOVE UPWARD - VISTAAR
COALspot.com - The BDI continued to move upward and rose by 2.86 pct closing at 934 points.
The cape index was up by 3.14 pct closing at 1,412 po ...
Saturday, 31 March 12
SRI LANKA IMPORTS 152,555 MT OF INDONESIAN COAL IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, shipped 27.126* million tons of coal in February 2012, compared to 28.21* million to ...
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- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- The University of Queensland
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
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